Consumers making decisions based on brands’ position on social issues

On September 3rd, 2018, athletic company Nike released a controversial ad featuring former San Francisco 49ers quarterback, Colin Kaepernick. The former NFL player made headlines after his 2016 decision to take a knee during the U.S. national anthem in protest against racial injustice. The Nike ad features a close-up on Kaepernick’s face with the tagline: “Believe in something. Even if it means sacrificing everything.”

“Nike’s leaders took a risk and gained a larger market share because they chose to make an impact by standing behind a social cause,” says Professor Katherine White, academic director of the Peter P. Dhillon Centre for Business Ethics at the UBC Sauder School of Business. “While the notion of companies supporting causes is not new - think traditional corporate responsibility initiatives - what I think is really cool is that we are seeing a clear trend where brands are taking a side on polarizing social issues. Rather than merely supporting causes that are generally ‘safe’, they are putting their influence where they can make the most meaningful social impact.”

“What’s even more interesting,” says Prof. White, “is that by taking a stand in this manner, brands are taking a risk, but the research suggests this approach resonates with consumers, especially millennials.”

This was certainly true for Nike. Like Kaepernick’s protest, Nike’s ad was divisive, but in the end the move paid off. The brand added more than 170,000 Instagram users and its shares hit an all-time high just days after the ad’s release.

According to the 2018 Edelman Earned Brand study, two-thirds (64 per cent) of the world’s consumers buy or boycott a brand based on their beliefs and a brand’s position on a social or political issue. This means that the success of a business today is dependent on its leaders being aware of their social impact, evaluating the place of business in society, and looking beyond profit margins to incorporate these values into the corporate culture.

“Responsible leadership means moving away from the ‘business as usual’, ‘profit for profit’s sake’ point of view,” says Prof. White. “There are many examples out there where firms are adopting a new mindset, shifting away from pursuing profit at all costs, and instead including sustainability and social responsibility alongside economic pursuits.”

A&W Food Services of Canada Inc., is a Canadian example of a company that has had sustainability and consumer trust at its core for decades. Most recently, the organization has become well-known for its bold ads educating the public that it serves beef without the use of hormones or steroids, chicken without the use of antibiotics, eggs farmed in Canada from hens fed a vegetarian diet, and organic, Fairtrade coffee. The company has not only made decisions about its products with ethics and sustainability in mind, it has trained its customers to expect these types of standards from the company.

“The world isn’t just about spreadsheets,” says Paul Hollands, chairman of the board and former CEO of A&W Food Services of Canada Inc.

“Customers are buying more than just the product, they’re buying a holistic sense of what the product represents and they want to know that, underlying it all, the company is making good decisions that are the kinds of balanced choices that they would look for.”

Decades of experience have taught Mr. Hollands that consumers respond to businesses that have a social conscience—whether it’s about a hormone-free hamburger or an ad for sustainably produced athletic wear—and that has a positive impact on the corporate bottom line.

“Every enterprise in some way interacts with the communities with which it operates,” says Mr. Hollands. “The trick is to think strategically about how we can make the communities in which we operate more successful.”

These are learnings Mr. Hollands brought with him as a past Chair of the UBC Sauder faculty advisory board. He used his business knowledge and expertise to help shape the new strategic direction the school has taken to ensure its students have the skills and knowledge to take on the challenges of today’s marketplace—a time where trust in corporations can make or break an organization.

“We want the next business leaders to be people who get the concepts of building trust and making a difference in their community and the larger role an enterprise plays in the success of a society,” he says.

At UBC Sauder, the Dhillon Centre for Business Ethics helps students engage in conversations around consumer trust and gain the tools to build up and expand on that trust through academic programming in responsible leadership, maintaining connections to the business community, and conducting research around how businesses can have a social impact.

Prof. White adds, “We’re training tomorrow’s thought leaders and business leaders, and if we can get the students to think about things in terms of social responsibility and sustainability, I think it can have really positive long-term impacts in terms of how they run their business and they how they operate in the future.”